Mobile Prepaid electricity continues to grow

September 30, 2011

As the love affair with prepaid mobile services continue to blossom, power distributors companies are racing against time to provide prepaid electricity to millions of households in their respective countries. A new technology has now made it possible for electricity consumers to reload their meters from any location through mobile text or SMS and keep track of their consumption and is suitable to the developing markets like Africa works well.The system allows consumers to manage their electricity supplies through text messaging. Besides allowing for easy reloading of electric meters through text, it does offer security due to adequate safeguards in user IDs and passwords and has reliable mechanisms in times or disaster or emergencies. The tracking of consumption in 30-minute intervals allows consumer to make demand side management decisions from the analysis I conducted.For instance, the customer can start switching off unnecessary devices since his credit is diminished, leading to more prudent electricity use. Moreover,the real time tracking of transactions leaves an audit trail that will be helpful in case of consumer complaints or conflicts with utilities. The meter can be turned on or off from anywhere via mobile text, with a valid username and password.This can be very effective way of dealing with perennial problem of power disconnection and power theft which is rampant in many developing countries where mobile telephone subscribers have reached almost 1billion in 2011, according to industry estimates.While speaking with an electricity company MD that has already pilot-tested the prepaid retail electricity system, I was impressed with they the man at the helm was relaxed as compared to last time we had a talk a year ago.

I learned that once their meters are loaded, consumers get a confirmation text and electricity is immediately provided. When credits are running low, consumers will receive a warning text, approximately four days before electricity is cut off. Countries that have now fully embraced prepaid electricity include South Africa and Indonesia, and more recently, India, home country of Australia where my Aunt recently told me how it has made her life easier and in New Zealand my former school mate Ronald Lomu expressed his satisfaction with the technology.In South Africa and Indonesia, prepaid is used by consumers using tokens and a meter with numbered keys where a code is punched in.In my observation, consumers do not benefit much but as for the prepaid meters because the customer satisfaction is not guaranteed. Many consumers are at the losing end on the use of prepaid electricity because prepaid electricity would mean further limiting access to power without necessarily improving the quality of service. I do also feel that prepaid power “precisely discriminates on the basis of who can afford it” while circumventing provisions on the disconnection of service and in developing world this can only worsen the unpopular tag associated with power companies as “public enemy number one”. For example in Africa and Asia, it can work if consumers get cheaper rates and continuous service under a pre-paid set up. If the charges will be lower then it will be a relief for consumers given the persistently low and erratic incomes of poor households though, there’s reason to expect that they will suffer power interruptions more under a pre-paid scheme. To me, balancing consumer and utility interests when the new retail and electricity supply systems are put in place is the key to success for this wonderful technology. The consumers have to be fully informed of how the prepaid system would work to their benefit without sacrificing the quality and reliability of the service provided by the utility.

Contador Harrison